Report Summary 1. Investment Rating The provided text does not mention the industry investment rating. 2. Core View On March 30, the liquidity continued to loosen, with major repo rates declining; the bond market rallied significantly; the convertible bond market corrected following the equity market, with most convertible bond issues falling; yields on U.S. Treasuries across all tenors generally declined, and yields on 10-year government bonds of major European economies also generally declined [1][2]. 3. Summary by Directory 3.1 Bond Market News - **Domestic News** - The Ministry of Finance reported that in 2025, the number of local government financing platforms and the scale of implicit debt decreased significantly. It also strengthened the management of the whole process of replacing existing implicit debt and was "zero-tolerant" of new implicit debt [4]. - The State Administration for Market Regulation required efforts to prevent and control "involution-style" competition in key industries and fields such as platform economy, photovoltaic, lithium batteries, and new energy vehicles [5]. - In 2025, the six major state-owned banks achieved year-on-year growth in both revenue and net profit attributable to shareholders, with a total net profit of 1.42 trillion yuan. Their asset sizes also increased steadily [6]. - **International News** - Fed Chairman Powell's dovish remarks eased market concerns, and traders began to bet on a small probability of a rate cut this year [7]. - **Commodities** - International crude oil futures prices continued to rise, while NYMEX natural gas futures prices turned down. WTI May crude oil futures rose 3.25% to $102.88 per barrel, and Brent May crude oil futures rose 0.18% to $112.78 per barrel. Spot gold rose 0.22% to $4,503.88 per ounce, and NYMEX May natural gas futures prices fell 6.33% to $2.886 per million British thermal units [8]. 3.2 Liquidity - **Open Market Operations** - On March 30, the central bank conducted 269.5 billion yuan of 7-day reverse repurchase operations at a fixed interest rate, with a net injection of 261.5 billion yuan after 8 billion yuan of reverse repurchases matured [10]. - **Funding Rates** - On March 30, the liquidity continued to loosen, and major repo rates declined. DR001 fell 0.67bp to 1.311%, and DR007 fell 1.05bp to 1.429% [11]. 3.3 Bond Market Dynamics - **Interest Rate Bonds** - **Spot Bond Yield Trends** - On March 30, the bond market rallied significantly. The yield of the 10-year Treasury bond active issue 250022 fell 0.80bp to 1.8100%, and the yield of the 10-year CDB bond active issue 250220 fell 1.75bp to 1.9530% [14]. - **Bond Tendering** - Information on the tendering of several bonds, including the 1-year, 3-year, and 10-year bonds, is provided, including the issue scale, winning yield, and other details [15]. - **Credit Bonds** - **Secondary Market Transaction Abnormalities** - On March 30, the trading prices of 3 industrial bonds deviated by more than 10%. "H1 Vanke 04" fell more than 10%, "22 Vanke MTN004" fell more than 38%, and "H1 Vanke 02" rose more than 86% [15]. - **Credit Bond Events** - Multiple companies announced events such as debt repayment uncertainties,逾期有息负债, bond payment arrangement adjustments, and issues related to bond fundraising use and information disclosure [16]. - **Convertible Bonds** - **Equity and Convertible Bond Indexes** - On March 30, the three major A-share indexes showed mixed performance. The convertible bond market corrected following the equity market, with the CSI Convertible Bond Index, Shanghai Stock Exchange Convertible Bond Index, and Shenzhen Stock Exchange Convertible Bond Index falling 0.93%, 0.89%, and 0.98% respectively. Most convertible bond issues fell [18]. - **Convertible Bond Tracking** - On March 30, KeMa Technology's application for issuing convertible bonds was approved by the CSRC [20]. - **Overseas Bond Markets** - **U.S. Bond Market** - On March 30, yields on U.S. Treasuries across all tenors generally declined. The 2-year U.S. Treasury yield fell 6bp to 3.82%, and the 10-year U.S. Treasury yield fell 9bp to 4.35%. The yield spread between the 2-year and 10-year U.S. Treasuries narrowed by 3bp to 53bp, and the yield spread between the 5-year and 30-year U.S. Treasuries widened by 2bp to 94bp [21][22]. - **European Bond Market** - On March 30, yields on 10-year government bonds of major European economies generally declined. The 10-year German government bond yield fell 6bp to 3.04%, and the 10-year government bond yields of France, Italy, and Spain fell 8bp, 8bp, and 4bp respectively [24]. - **Price Changes of Chinese Dollar Bonds** - Information on the daily price changes of Chinese dollar bonds as of the close on March 30 is provided, including the yields and price changes of various bonds [26].

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - Last week, the issuance volume in the primary market of Chinese offshore bonds declined, with 5 new bonds issued, totaling approximately USD 680 million. The secondary market saw an expanded decline in the high - yield segment. The yields of US Treasuries increased significantly, and various central banks around the world had different monetary policy decisions. There were also multiple macro - economic events and corporate - related news [1][2][3] Summary by Relevant Catalogs 1. Primary Market - The issuance volume in the primary market of Chinese offshore bonds decreased last week, with 5 new bonds issued, totaling about USD 680 million. China Power Construction Group issued a USD 300 million green bond, the largest issuance scale of the week, and Qingdao Pingdu Holdings Group issued a USD 200 million social responsibility bond with a coupon rate of 6.5%, the highest - priced new bond of the week [1][8][13] 2. Secondary Market 2.1 Chinese US - dollar Bond Index Performance - The Chinese US - dollar bond index (Bloomberg Barclays) fell 0.39% week - on - week, and the emerging - market US - dollar bond index dropped 0.99%. The investment - grade index closed at 202.6233, down 0.35% for the week, and the high - yield index closed at 163.3203, down 0.66% [10] - The Chinese US - dollar bond return index (Markit iBoxx) declined 0.37% week - on - week. The investment - grade return index closed at 244.9554, down 0.23% for the week, and the high - yield return index closed at 240.2515, down 1.66% [14] 2.2 Chinese US - dollar Bond Performance by Industry - Different industries had different yield changes, with only the non - essential consumer goods sector rising, and the real estate and energy sectors leading the decline. For example, the non - essential consumer goods sector had a yield decline of 8.9bps, while the real estate sector's yield increased by 6.7Mbps, and the energy sector's yield increased by 130.5bps [19][21] 2.3 Chinese US - dollar Bond Performance by Different Ratings - According to Bloomberg's comprehensive ratings, both investment - grade and high - yield names declined. The weekly yields of A - rated, BBB - rated, BB - rated, DD + to NR - rated, and unrated names all increased [21] 2.4 Hot Events in the Bond Market Last Week - Sunac China Holdings is expected to significantly narrow its attributable loss in 2025. Fanhai Holding had overdue interest - bearing debts of 34.001 billion yuan as of February 28. Shanghai Shimao Construction had an additional approximately 730 million yuan of overdue debts, with a cumulative overdue bond principal and interest of about 3.36 billion yuan [22][23][24] 2.5 Rating Adjustments of Entities Last Week - Moody's maintained the rating and stable outlook of China Guangfa Bank. S&P adjusted the outlook of China Jinmao to negative, maintained the stable outlook of China Overseas Grand Oceans Group, and also maintained the stable outlook of Poly Developments. The reasons were related to the companies' asset quality, leverage ratios, and market environment [26] 3. US Treasury Quotes - The report provides quotes of US Treasuries, including details such as code, maturity date, current price, yield to maturity, and coupon for 30 US Treasuries with maturities over 6 months, sorted from high to low by yield to maturity [27] 4. Macro Data Tracking - As of March 20, the yields of US Treasuries at different maturities increased compared to the previous week. The 1 - year yield was 3.7972% (up 17.19bps), the 2 - year yield was 3.9001% (up 18.32bps), the 5 - year yield was 4.0081% (up 15.03bps), and the 10 - year yield was 4.3796% (up 10.29bps) [32] 5. Macro News - The Federal Reserve kept the federal funds rate target range at 3.50% - 3.75%, raised inflation and economic growth expectations. The US February PPI exceeded expectations. The US national debt exceeded 39 trillion US dollars. The number of initial jobless claims in the US dropped to the lowest this year [31][33][34] - Central banks in Europe, Japan, the UK, Switzerland, and Sweden maintained interest rates unchanged. The Bank of Canada kept rates steady. The Reserve Bank of Australia raised rates by 25 basis points to 4.1% [37][38][39] - The risk of attacks on Middle Eastern energy facilities escalated. China and the US held economic and trade consultations in Paris. China's first economic report card for the 15th Five - Year Plan period was released. The Ministry of Finance will continue to implement a more proactive fiscal policy [41][42][43] - China's central bank will firmly maintain the stable operation of financial markets. China's fiscal revenue and expenditure in January - February had different growth rates. The National Development and Reform Commission launched 13 major foreign - funded projects. The electricity consumption from January - February increased by 6.1% year - on - year [45][47][48] - China's 70 - city housing price data for February showed a narrowing of price declines. Shanghai adjusted the minimum down payment ratio for commercial housing loans [50][51]

Report Industry Investment Rating - Not provided in the given content Core View of the Report - The impact of the US-Israel-Iran conflict on US inflation may not be as significant as the market has priced. The report maintains the expectation that the Federal Reserve will cut interest rates twice in 2026, totaling 50 basis points. The current correction in the US Treasury market provides a configuration window for Chinese dollar-denominated bonds [1][9] Summary by Relevant Catalogs Re-inflation Expectations Drive a Sharp Rise in US Treasury Yields - The conflict in the Middle East has led to concerns about re-inflation, causing a rapid increase in US Treasury yields. Since the outbreak of the US-Israel-Iran conflict, the yields of key-term US Treasuries have fully reversed all the gains since the beginning of 2026. The 2-year US Treasury yield has risen to 3.8%, reaching its highest level since July last year. The market's expectation of the Federal Reserve's interest rate cuts has reversed, and it is now expected that the Fed may not cut rates this year and may even raise them [2] - The current tense situation in the Middle East shows no sign of easing. The market is worried that the conflict may last longer, driving up oil prices and strengthening expectations of re-inflation and changes in the monetary policy path. Fed Chairman Powell's hawkish remarks have further increased the pressure on the US Treasury market [4] The Impact of the US-Israel-Iran Conflict on Inflation May Not Be as Large as the Market Pricing - The impact of the obstruction of navigation in the Strait of Hormuz on global inflation may not be as large as the market has priced. The Russia-Ukraine conflict caused a more extensive and long-lasting global inflation shock, while the US-Israel-Iran conflict mainly affects inflation expectations through the shock to global oil and gas supplies caused by the obstruction of navigation in the Strait of Hormuz. The impact of the US-Israel-Iran conflict on global inflation is expected to be more limited in scope and duration compared to the Russia-Ukraine conflict [7] - In February 2026, the US Supreme Court ruled that the large-scale global tariff policy implemented by the Trump administration was illegal, leading to a marginal decline in US tariffs. The subsequent temporary tariffs may face more legal challenges and uncertainties, and the current downward trend in tariffs may offset some of the inflationary impact caused by rising energy prices [8] The Correction in US Treasuries Brings Allocation Opportunities for Chinese Dollar-Denominated Bonds - Due to concerns about re-inflation caused by the oil supply shock and the hawkish tone of the Fed's March interest rate meeting, the interest rate futures market no longer expects the Federal Reserve to cut interest rates in 2026. Since the outbreak of the US-Israel-Iran conflict at the end of February, the 2-year US Treasury yield has risen by more than 40 basis points to around 3.8% [9] - The correction in the US Treasury market has also led to an adjustment in Chinese dollar-denominated bonds. Since the US-Israel-Iran conflict at the end of February, the Chinese dollar-denominated bond index has significantly declined. The Bloomberg Barclays Chinese dollar-denominated bond total return index has fallen by 1.0%, and the yield to maturity has risen by about 38 basis points to 5.13%. The market adjustment provides an allocation opportunity for Chinese dollar-denominated bonds [9]

Market Focus - The report highlights the performance of the interest rate market, indicating fluctuations that could impact investment strategies[1] - It discusses the exchange rate market, emphasizing the potential effects on currency valuations and international trade[1] Chinese Dollar Bonds - The issuance of Chinese overseas bonds in the primary market shows a significant volume, with various ratings from Aaa to Baa2, reflecting diverse credit quality[1] - In the secondary market, the performance of these bonds varies, with yields ranging from 2.25% to 11.80%, indicating differing risk perceptions among investors[1] Credit Rating Actions - Recent credit rating changes include a stable outlook for Zhuhai City Linzi District Jiuhua Financial Holdings Co., Ltd. with a rating of BBB[19] - Moody's maintained the rating for East Asia Bank Ltd. at A3 with an upgraded outlook, while S&P downgraded Meituan to BBB+ with a negative outlook[20]

Report Industry Investment Rating - US stocks: Standard allocation [29] - European stocks: Overweight allocation [31] - Chinese A - shares: Standard allocation [33] - Hong Kong stocks: Standard allocation [34] - Japanese stocks: Overweight allocation [36] - Indian market: Underweight allocation [38] - US bond market: Overweight allocation [55] - Chinese bond market: Overweight allocation [59] - Japanese bond market: Underweight allocation [60] - European bond market: Standard allocation [62] Core Viewpoints of the Report - In February 2026, the global market was highly differentiated. The Japanese stock market led the world, while the Hang Seng Tech Index tumbled. The HALO trading strategy dominated the US and European stock markets [26][28][31] - The performance of the US economy showed mixed signals. The employment data was positive, but the inflation data provided room for policy adjustment. The economic expansion pace in the US slowed down [7][15] - In the Chinese market, the inflation pressure was weak, the financial data was strong, but the real - estate recovery lacked momentum. The stock market was supported by liquidity, but the overall economic recovery needed time [18][33] - Central bank policies around the world varied. The European Central Bank maintained the deposit rate, the Bank of England signaled a possible interest - rate cut, and the Reserve Bank of Australia raised interest rates [21] Summary by Relevant Catalogs Stock Market - **Global Stock Market Performance**: In February, the Japanese stock market (Nikkei 225 Index) soared by 16.91% year - to - date. The Hang Seng Tech Index dropped significantly, with a year - to - date decline of 6.86%. The US stock market was divided, with technology stocks dragging down the market [25][28] - **US Stocks**: The S&P 500 Index fell 1.43% in February. The software industry's decline stabilized, and the HALO trading strategy was dominant. The Middle East situation had a short - term impact on the market [29][30][31] - **European Stocks**: The European STOXX 600 Index rose 3.38% in February. European stocks benefited from the HALO trade, and Germany's fiscal policy supported the economy. However, the Middle East conflict was a risk factor [31] - **Chinese A - shares**: The Shanghai Composite Index rose 0.56% in February. The market was supported by liquidity, but the overall economic recovery was slow, and structural opportunities were prominent [33] - **Hong Kong Stocks**: The Hang Seng Index fell 1.83% in February. The Hang Seng Tech Index led the decline due to AI substitution concerns and reduced profit visibility. However, the valuation was at a low level globally [34] - **Japanese/Indian Markets**: The Japanese stock market was boosted by political events and economic improvement. The Indian stock market was affected by the uncertain trade agreement, IT sector risks, and the Middle East situation [36][38][40] Bond Market - **Primary Market**: In February, the issuance of Chinese - funded US dollar bonds decreased due to the Spring Festival, while the issuance of offshore RMB bonds increased significantly [44] - **Secondary Market**: Markit iBoxx Chinese - funded US dollar investment - grade and high - yield bond indices rose in February. The real - estate, city - investment, and financial bond indices also showed positive performance [47][49] - **Global Bond Market Performance**: In February, major bond markets generally rose. US Treasury bonds, European government bonds, and Chinese government bonds all had positive returns [51] - **US Bond Market**: The US bond market rose in February due to the Middle East situation and AI concerns. However, there was a potential for a correction in March. The reasons for the overweight allocation were the expected Fed policy easing and multiple hedging needs [55][56] - **Chinese Bond Market**: The Chinese bond market had positive returns in February. The reasons for the overweight allocation were the normalization of central - bank bond trading and policy support [59] - **Japanese Bond Market**: The Japanese bond market showed a short - term recovery in February, but long - term risks remained due to fiscal expansion and inflation concerns. It was underweighted [60] - **European Bond Market**: The European bond market had a positive performance in February. The market was in a standard allocation due to supply pressure and external uncertainties [62][63] Foreign Exchange Market - **Market Performance**: In February, the US dollar index rose slightly, the RMB appreciated, and the Australian dollar remained strong [67][68] - **Driving Factors**: The Fed's policy orientation affected the US dollar. The Chinese central bank guided the RMB exchange rate, and the Australian central bank's interest - rate hike supported the Australian dollar [68] Commodity Market - **Market Performance**: In February, gold rebounded strongly, crude oil prices fluctuated at a high level, and iron ore prices declined [72] - **Driving Factors**: Geopolitical uncertainties drove up gold and crude oil prices, while high iron ore inventories pressured its price [72] Fund Market - **Selected Funds**: The report recommended various funds, including money - market funds, short - term bond funds, investment - grade bond funds, and stock funds from different regions [75]

Group 1: Core Drivers and Risk Premium - The impact of the US-Iran conflict on the global economy and markets is reflected in rising energy prices, with the Middle East being a core energy region. The conflict has led to attacks on energy facilities and a de facto blockade of the critical Strait of Hormuz, which transports 20 million barrels per day, accounting for about 20% of global oil consumption [4] - A key "pain threshold" is identified at $90 per barrel for crude oil and a 5% yield on 30-year US Treasury bonds, which, if breached, could trigger severe asset revaluation and policy intervention [4] - The US dollar index's critical psychological level is 100; a breach indicates tightening global liquidity and negative impacts on emerging market risk assets [4] Group 2: Energy and Commodities – Source of Inflation - The shipping crisis in the Strait of Hormuz is evolving into a global economic shock affecting energy, trade, and inflation, with significant implications depending on the duration of the blockade and conflict [10] - International oil prices have surged due to fears of long-term disruptions in the global energy supply chain, leading to rising retail gasoline prices in the US [11] - OPEC+ announced a minor production increase of 206,000 barrels per day, which is negligible compared to the potential disruption of 20 million barrels per day [11] Group 3: Financial Markets - The war has reduced the likelihood of interest rate cuts in the short term, with expectations for the first cut being pushed back from early February to June, now viewed as uncertain [20] - The US Treasury market faces dual influences from safe-haven inflows and oil price pressures, with high oil prices expected to lead to a re-evaluation of Federal Reserve policy paths and fiscal risk premiums [23] - The US dollar is expected to maintain its strength due to its safe-haven status and energy dominance, but the ongoing conflict may lead to negative chain reactions, including inflation pressures and growth slowdowns [26] Group 4: Sector Performance - The S&P 500 shows a divergence in sector performance, with funds flowing back into technology and light asset sectors less affected by geopolitical conflicts, while energy stocks have strengthened moderately [36] - In the A-share market, funds are shifting from high-valuation growth and mid-to-downstream manufacturing sectors to defensive sectors, with energy stocks leading the gains due to rising oil price expectations [39] - The credit spread of Chinese dollar bonds remains stable, supported by supply-demand dynamics and credit fundamentals, with no significant inflation issues in China [42]

Report Summary 1. Investment Rating - No investment rating provided in the report. 2. Core View - The primary market issuance of Chinese offshore bonds remained at a low level last week, with only 2 new bonds issued, totaling approximately $365 million. The secondary market showed a slight increase, and US Treasury yields declined across the board. The macro - economic environment is complex, with various events such as geopolitical conflicts, policy changes, and corporate performance fluctuations affecting the market [1][2][3]. 3. Summary by Directory 3.1 Primary Market - Last week, the primary market issuance of Chinese offshore bonds was low, with 2 new bonds issued, amounting to about $365 million. Among them, Seazen Group issued a $355 million bond with a coupon rate of 11.8%, which was the largest - scale and highest - priced new bond of the week [1][7]. 3.2 Secondary Market - **Index Performance**: The Bloomberg Barclays Chinese US - dollar bond index rose 0.42% week - on - week, and the emerging market US - dollar bond index rose 0.17%. The investment - grade index closed at 205.7648, up 0.45% for the week, and the high - yield index closed at 165.0443, up 0.19% for the week. The Markit iBoxx Chinese US - dollar bond return index rose 0.27% week - on - week, with the investment - grade return index at 247.3125 (up 0.28%) and the high - yield return index at 245.5983 (up 0.24%) [5][8][13]. - **Industry Performance**: The consumer staples and consumer discretionary sectors led the gains, while the real estate and healthcare sectors led the losses. The consumer staples sector was affected by the rise of names like JUEBAO INVESTMENT LIMITED and H&H International Holdings Limited, with yields down 12.9bps. The consumer discretionary sector was influenced by the rise of Huazhu Group Limited and NIO Inc., with yields down 10.7bps. The real estate sector was affected by the decline of names such as Times China Holdings Limited and Logan Group Company Limited, with yields up 675.7bps. The healthcare sector was affected by the decline of names like Luye Pharma Group Ltd. and MicroPort Scientific Corporation, with yields up 37.5bps [18][23]. - **Rating Performance**: According to Bloomberg's comprehensive ratings, investment - grade names all rose, with the A - grade weekly yield down 1.7bps and the BBB - grade weekly yield down 5.3bps. High - yield names mostly fell, with the BB - grade yield down 3.1bps, the DD+ to NR - grade yield up about 91.1bps, and the unrated names' yield up 153.7bps [20][21][24]. - **Hot Events**: Sunshine City had a total of 65.601 billion yuan in overdue debt principal as of February 26. Fanhai Holding Group Co., Ltd. failed to repay interest - bearing debts on schedule, involving a principal of 34.026 billion yuan [24]. - **Rating Adjustments**: Moody's upgraded CenturyLink's corporate family rating from B2 to B1 due to improved business conditions. Fitch confirmed Lianyungang Port Group's long - term issuer rating as BBB, and Zhongzheng Pengyuan International maintained a stable outlook for Zhangzhou Jingyuan Development Co., Ltd. due to government support [26][28]. 3.3 US Treasury Quotes - The report provides quotes for 30 US Treasury bonds with maturities over 6 months, sorted by descending yield to maturity [29]. 3.4 Macro Data Tracking - As of February 27, the 1 - year US Treasury yield was 3.4746%, down 3.11bps from the previous week; the 2 - year yield was 3.3749%, down 10.32bps; the 5 - year yield was 3.5017%, down 14.5bps; and the 10 - year yield was 3.9375%, down 14.51bps [33]. 3.5 Macro News - **Geopolitical**: The US and Israel launched an air strike on Iran on February 28, which put the global market on high alert [32]. - **Policy**: The US started to levy a 10% global tariff and is preparing to raise it to 15%. The Fed's Milan expects a 100 - basis - point interest rate cut in 2026, while Goolsbee believes no further rate cuts are appropriate until more evidence of sustained inflation decline. Waller may pause rate hikes if February employment data is strong. The US will impose counter -vailing duties on crystalline silicon solar cell components imported from India, Indonesia, and Laos. The Bank of England's Bailey expects to cut interest rates soon. The Central Bank of Thailand unexpectedly cut the key interest rate by 25 basis points to 1%. The Bank of Korea maintained the benchmark interest rate at 2.5% [34][35][36]. - **Economic Data**: Global debt reached a record $348 trillion at the end of last year. IDC predicts a 12.9% year - on - year decline in global smartphone shipments in 2026. NVIDIA's Q4 FY2026 revenue was $68.1 billion, exceeding expectations. South Korea's birth rate rose for the second consecutive year, with the total fertility rate rising to 0.8. The Spring Festival holiday saw 100,000 square meters of new commercial housing signed in 21 key cities, basically the same as last year. Shanghai loosened non - local home - buying restrictions. Chinese brand passenger car sales in January 2026 decreased by 32.1% month - on - month and 8.9% year - on - year [39][43][44]. - **Market Development**: The dim sum bond market has grown for six consecutive years as of the end of 2025, with a surviving scale of about 1.3 trillion yuan [53][54].

Core Insights - The 30-year government bond ETF (511090) has seen active trading, with a turnover of 13% and a transaction volume of 2.871 billion yuan as of February 27, 2026, at 14:09 [1] - Over the past year, the average daily trading volume of the 30-year government bond ETF has been 8.108 billion yuan [1] - In the last 13 trading days, there have been net inflows on 9 days, totaling 819 million yuan [1] Market Trends - The 30-year government bond futures saw a slight decline of 0.01%, while the 10-year, 5-year, and 2-year contracts experienced minor increases of 0.02%, 0.01%, and 0.01% respectively as of February 27 [1] - The RMB exchange rate has entered a rapid appreciation phase, with both onshore and offshore RMB surpassing the 6.84 mark, reaching a nearly three-year high [1] - The strengthening of the RMB has positively impacted the offshore bond issuance environment, making offshore RMB bonds (dim sum bonds) increasingly attractive due to their local currency denomination, lower costs, and reduced exchange rate risks [1] Issuance Dynamics - In February alone, the issuance scale of dim sum bonds has exceeded 120 billion yuan [1] - Although Chinese dollar bonds benefit from lower repayment costs, they face rising hedging costs and exchange rate exposure risks, especially with the Federal Reserve entering a rate-cutting cycle [1] - The restructuring of the offshore debt market for Chinese entities has become a clear trend [1][2]

Market Overview - The bond market experienced a strong start after the Spring Festival, with government bond futures closing higher across the board, and interbank bond yields declining by approximately 0.5 basis points [1][2] - The People's Bank of China (PBOC) maintained a stable attitude towards liquidity management, indicating that interbank market liquidity will remain at a reasonable and ample level rather than becoming excessively loose [1][7] Bond Market Performance - The 30-year government bond futures rose by 0.20% to close at 112.96, while the 10-year futures increased by 0.02% to 108.5 [2] - The yield on the 10-year China Development Bank bond decreased by 0.25 basis points to 1.9405%, and the yield on the 30-year government bond fell by 0.5 basis points to 2.2195% [2] International Bond Market - In North America, U.S. Treasury yields fell across the board, with the 10-year yield dropping by 4.98 basis points to 4.031% [3] - In Asia, Japanese bond yields also declined, with the 10-year yield down by 3.3 basis points to 2.076% [3] - In the Eurozone, the 10-year French bond yield decreased by 2.4 basis points to 3.274% [3] Funding Conditions - The PBOC conducted a 7-day reverse repurchase operation of 526 billion yuan at a fixed rate of 1.40%, resulting in a net withdrawal of 926.4 billion yuan for the day [5] - The Shibor rates for short-term instruments mostly increased, with the overnight rate rising by 4.64 basis points to 1.362% [5] Institutional Insights - Recent trends in the Chinese dollar bond market show a stable overall performance, with a recommendation to prioritize coupon strategies while remaining cautious about lower-rated bonds [7] - The recent U.S. tariff policy changes have introduced uncertainty, but the impact on Chinese exports is expected to be relatively limited [7] - The PBOC's actions indicate a commitment to maintaining liquidity stability, with expectations for the 10-year government bond yield to fluctuate between 1.77% and 1.85% in the short term [7]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The People's Bank of China will continue to implement a moderately loose monetary policy in 2026, and there is still room for reserve requirement ratio cuts and interest rate cuts [6]. - The 10 - year Treasury bond yield is in a narrow - range corridor. In the short term, the bond market sentiment may remain warm before the Spring Festival, but attention should be paid to the key resistance level. In the medium term, the bond market may face headwinds, and caution is needed when participating in ultra - long - term bond assets [7]. - In 2026, the local bond market will "front - load" issuance, and funds will be focused on new infrastructure construction, urban renewal and public services, intelligent upgrading of traditional major infrastructure, resolving stock debt risks, and industrial upgrading and national security - related fields [8][9][10][11]. - In 2026, the global attractiveness of Chinese fixed - income assets may increase, but the allocation power of overseas investors may not be the decisive factor affecting the bond yield trend [12]. - In the context of a volatile domestic stock market, investors can focus on four bond market allocation opportunities: the allocation and trading value of interest - rate bonds, the coupon advantage of high - quality credit bonds, the enhanced elasticity opportunity of convertible bonds, and the diversification value of international allocation [14] 3. Summary by Relevant Catalogs 1.1 Central Economic Work Conference and Monetary Policy in 2026 - The People's Bank of China will implement a moderately loose monetary policy, increasing counter - cyclical and cross - cyclical adjustment. There is still room for reserve requirement ratio cuts (the current average legal deposit reserve ratio is 6.3%) and interest rate cuts (stable RMB exchange rate, narrowing bank net interest margin, and maturing long - term deposits) [6] 1.2 Bond Market Pattern in 2026 - The 10 - year Treasury bond yield is around 1.8% - 1.9%. In the short term, the bond market sentiment may be warm before the Spring Festival, but attention should be paid to the 1.80% resistance level. In the medium term, the bond market may face headwinds, and caution is needed when participating in ultra - long - term bond assets [7] 1.3 Inclination of Local Bond Market Scale in 2026 - Funds will be focused on new infrastructure construction (related to new technologies), urban renewal and public services, intelligent upgrading of traditional infrastructure, resolving stock debt risks (about 6 trillion special refinancing bonds for debt replacement will be basically issued), and industrial upgrading and national security - related fields [8][9][10][11] 1.4 Global Attractiveness of Chinese Fixed - Income Assets in 2026 - Chinese fixed - income assets can effectively diversify risks in a global asset portfolio. With the appreciation of the RMB against the US dollar, their global attractiveness may increase, but the influence of overseas investors may not be decisive [12] 1.5 Bond Market Allocation Opportunities in 2026 - Interest - rate bonds: Provide a stable foundation for portfolio construction and trading opportunities for investors with certain trading abilities [15] - High - quality credit bonds: Focus on high - quality urban investment bonds in economically strong regions and industrial bonds in strategic industries [16] - Convertible bonds: Select bonds related to policy - supported sectors and pay attention to valuation [17] - International allocation: Chinese interest - rate bonds can attract foreign capital, and some high - quality Chinese dollar bonds can be a useful supplement [18]